This essay is written specifically to address the current trend of Black Financial Literacy Hustlers, who have devised crafty individualist, for- profit schemes, under the guise of Black Empowerment, building Generational Wealth, and sovereignty. I will address one of the most heavily promoted tools to obtain Black Liberation and Sovereignty; which is the use of cryptocurrencies, such as Bitcoin. I will present evidence to prove that cryptocurrency as a resource for exchanging or trading value does not automatically translate to power and freedom for poor and working masses of Global Black African people. Neither does the use of cryptocurrencies remove Black African people from the exploitative relation with our White and Arab supremacist enemies and Black Class adversaries. In the final analysis Bitcoin and cryptocurrencies should be avoided by so-called Revolutionary-Pan-African/African-Centered people who are serious about Nation-Building, Sovereignty, and Liberation.
The emergence of Blockchain and “New Money”
Blockchains are tamper resistant digital ledgers implemented in a distributed fashion (i.e., without a central repository or computer) and usually without a central authority (i.e., a bank, company, or government). At their basic level, they enable a community of users to record transactions in a shared ledger within that community. This ensures that, under normal operation of the blockchain network, no transaction can be changed once published. In 2008, the blockchain idea was combined with several other technologies and computing concepts to create modern cryptocurrencies: electronic cash protected through cryptographic mechanisms instead of a central repository or authority. The first such blockchain based cryptocurrency was Bitcoin.
Cryptocurrencies like Bitcoin are constructed on a digital platform which requires the investment of (real money/cash) in exchange for a medium that actually is not a store of value. To be clear, the digital coins must be, and can only be purchased in exchange for real dollars. The value of each coin is also assessed in real dollar amounts. Therefore, without exchanging your actual money (dollars) you cannot purchase any cryptocurrency. The money in your pocket, although it is fiat currency, is still considered a “store of value.”
To be a currency, Bitcoin or any cryptocurrencies, should be a serviceable unit of account, means of payments, and a stable store of value. Cryptocurrencies are none of those things. No one prices anything in Bitcoin. Few retailers accept it. And it is a poor store of value because its price can fluctuate by 20-30% in a single day. And since its price has been so unstable or volatile almost, no merchant will ever use it as a means of payment: the profit margin of any merchant can be wiped out in a matter of minutes if he or she accepts Bitcoin or any other cryptocurrency by the change in the dollar price of a cryptocurrency. A proper means of payments needs to have stable purchasing power; otherwise, no one will ever use them. Roubini (2020).
The narrative that the cryptocurrency proponents used to champion this innovation is that your money is now “free” from the rule and oversight of governments. They even promote the idea that eventually cryptocurrency will outpace global money markets, and be the dominant form of value exchange, or money in the world. Although the blockchain technology itself is useful, the cryptocurrencies have been identified by all leading economists as a scheme, and a foolish assumption, not supported by any evidence. The dollar as currency, for example, issued and backed by the government, is the only guaranteed form of exchange acceptable anywhere in the world. This means you can literally take your dollars anywhere in the world and exchange them for tangible goods like a bag of rice for example. Try taking your Bitcoin to a village in Africa and say, “hey, here is a Bitcoin for a pound of your rice.” I highly doubt that you would have food to eat for the day. Therefore, no matter how much Bitcoin you have stored on a digital server, you would ultimately have to exchange your cryptocurrency for whatever legal tender is necessary to purchase goods and services.
Some Leftists and liberals would have us believe cryptocurrency will put an end to the exploitative relationship between workers and banking entities, under the pretense of economic liberation and sovereignty. The fact that all this money will now be under the absolute control of the wealthiest investors goes completely overlooked. You still are only functioning at the behest of someone else who has more money, influence, and power than you do. Placing the power and control of an economic vehicle into the hands of a few multimillionaires and billionaires essentially makes that wealthy few the “Lords” over that market. Going into an economy like this, takes the power and control of money out of the hands of banks, where it can be regulated by governments, and creates an open class of digital Oligarchs. They are thereby kings of the crypto world, with no true allegiance to any government, or any social accountability to any group or population.
The list of early Bitcoin investors and innovators is composed of White people who already possessed substantial financial wealth. From there the project blossomed, attracting other wealthy tech-savvy investors such as the billionaire Winklevoss twin brothers who parted ways with Facebook before entering the Bitcoin world. At its very core, Bitcoin and cryptocurrencies are the developments of wealthy Whites, to serve their interests. What made cryptocurrency so attractive is that international money launderers, terrorist organizations, sex traffickers, drug dealers, and even White Nationalist hate groups now have an avenue to move large transactions around the world largely undetected and unmonitored. Consequently, as you play the crypto markets and work the blockchain, you could be helping to indirectly, facilitate some global terrorist organization, or some rich White anarchist whose only purpose in crypto space is to advance their White supremacist agendas.
I would also assert that as a financial scheme no different from multilevel marketing, cryptocurrencies quickly became the thing of economic “Speculation.” Speculation occurs in the Capitalistic money market economy when groups of financiers or investors intentionally inflate the value of something causing a massive interest by the public. The public values the direction of the market increase and people rush to invest in what they can. The speculative nature of these investments makes a thing appear to be worth more than what it is, when it really is not. For example, everyone in the United States could, and should, be guaranteed a home. However, because of the market economy and the false concept of scarcity, speculation is really the only thing that keeps banks going, and people unable to get loans or even buy their own supplies and build a house or have affordable rent. This is even worse with cryptocurrencies because the coins lose value over night. Neither can you use the coins themselves for any purposes, unlike living in a house or driving a car. Even if gold, for example, lost all of its value, at least you could wear it for some nice-looking piece of jewelry. If cryptocurrency had an actual value, you could get coins at your local grocery store just like you could a lottery ticket. Investing in the crypto markets and digital currency is nothing more than a low risk, high yield video game. You can win today and lose tomorrow. There are far too many cases to cite here where some billionaire like Elon Musk will send out a Tweet or post on Instagram, and within minutes, people will rush to purchase the cryptocurrency (imaginary Unicorn) mentioned.
Remember the housing crises and bubble of 2007-2010 in the United States? Black African people in the U.S. suffered twice as hard as everyone else. This was once again the result of the illusion of scarcity, speculation, and the imaginary value of commodities which resulted in what we call a “Bubble.” When prices slowly balloon, or rise, and suddenly depreciate, that is called a “Bubble.” Yes. Every bubble gets so large until it eventually BURSTS! And just like with stock bubbles, real estate bubbles, and all other market creation for investment, cryptocurrency will have its growth, balloon, and eventually burst (decline). Leading Economist and Professor Nouriel Roubini calls crypto currency a “self-fulfilling bubble” because the wealthiest investors intentionally force the inflation and sell off the cryptocurrencies causing bubbles to occur. Proving that the coins are virtually worthless. Roubini calls cryptocurrency “shit coins” because they are not worth crap. Anything that has a value that can rise over ten percent in the morning and fall by ten percent at night is worthless. The good thing about cryptocurrency, however, is that average working-class people who decide to invest do not even have the thousands of dollars to invest which could destroy their lives like with stock and real estate. Investors should be aware, whether it is one year or ten years, every cryptocurrency will bubble, and you stand the chance of losing everything you invest. The other possibility is that nations and central banks adopt national cyber currency which will make cryptocurrency worth peanuts. So far, China, the world’s leading economy, is developing a cyber currency. As nations adopt cyber currencies, which are extremely efficient and predictable, cryptocurrencies will become obsolete. If you follow international financial business reports on a week-to-week basis, you see that the talk alone about nationalized digital currencies causes bubbles in the unstable cryptocurrency market.
Pump and Dump Schemes
Pump-and-dump (P&D) schemes are a type of price manipulation in which an asset’s price is artificially inflated so that a cheaply purchased asset can be sold at a higher price. Once dumped, prices quickly fall, and investors lose money.
In the cryptocurrency market, P&Ds are organized through pump groups who communicate through heavily encrypted messaging platforms. Investors learn about pump groups through advertisements on social media.
To orchestrate a price inflation, an operator announces the target date, time, and exchange to the pump group. This information is usually communicated at least one day in advance, without revealing the identity of the target token. Then, just before the planned inflation, group members receive the token’s symbol, and the P&D begins. Unlike stock market manipulators, cryptocurrency manipulators openly declare their intentions to pump specific coins, rather than trying to deceive investors. Puzzlingly, people join in despite negative expected returns. Pumps generate extreme price distortions of 65% on average, abnormal trading volumes in the millions of dollars, and large wealth transfers between participants. These manipulation schemes are likely to persist as long as regulators and exchanges turn a blind eye.
There is ample evidence proving that elite investors have developed sophisticated networks solely to communicate massive pump and dumps. It is easy to justify a wrong being done when you are profiting from it. But that still does not make it morally right. There are several notable cases where celebrities, like rapper T.I., have been busted for their intentional involvement in pump-and-dump cryptocurrency schemes. The minor players are almost always outed easily. However, the mega millionaire and billionaire White Oligarchs go unscathed, or completely rob the masses blind as we saw in Turkey (April 2021) with the theft of $2 Billion in one day.
Liberation for the privileged few
We are locked in a global financial imperialist system, created by, and maintained by White Europeans for their control and domination of the world. This system has an economic base called “Capitalism.” In this system, one person’s work-energy-labor-time is used to secure another person’s profit-wealth. Essentially, what happens is, one person does a certain value of work which earns a profit. Most of the profit from that work goes to someone else. This is not a fair or equal exchange. There is no balance. There is no righteousness. There is no propriety. This would go against a fundamental law of “Maat.” From each according to their work, to each according to their need is an ancient ideal. An ideal based on fairness and justice.
Prior to the establishment of the current global system, Black-African people were subjected to a war of global conquest and enslavement. The root of the current global economic system is Black-African enslavement, and the colonization of Indigenous Black-African lands. Black African people have sought ways to escape the suffrage of enslavement and colonialism in this system for at least 500 years.
Some of the reactionary methods used by Black-African people comprise groups, tribes, and clans selling off other Africans to our enemies. Other reactionary methods toward liberation consisted of Black Africans investing in the system in multiple ways, with the goal of profiting from it for individual gain. This approach gave birth to the early 20th century rise of Black Nationalism and Black Capitalism. The idea that if Black-African people can become economically strong, we could become social-politically equal to our White enemies. We have slogans like, “Buy Black” “Pool our resources” and “Do for self” which are supposed to be alternatives to supporting our enemies. However, this ideology only serves to support a small minority of Black-African people, at the expense of the majority working-poor population. The Black Nationalist ideology only serves to put a Black face on White wealth and economic prosperity. The result is a class of Black holders of large sums of money. According to the U.S. Census about 20% of Black people in the United States live in poverty. Next to that, the median black wealth in the U.S. is between $17,000 and $25,000. Take away the house and car and it’s even less. Most middle-income families don’t have the money needed to invest in cryptocurrency to see a substantial profit, so we can not expect lower-income families to either. Last, for those who invest in cryptocurrencies, they circumvent the civic duty of contributing to programs that benefit the poor. Without a governing party in place to be sure that the “haves” are taxed to assist the have-nots, crypto investors can become disproportionately wealthy as entire populations who don’t have access become impoverished.
Individual solution to a collective problem.
They say Black folk get money and leave the hood. Well, it is the quest for the Black piece of the American pie that does it. Black businesses, Black banks, Black investment pools, Myth and of fictitious $2 Trillion Black Dollar, Black Empowerment-Financial literacy coaching schemes, etc.… are nothing more than illusions and abstractions from a once and for all solution. These assimilationist fantasies inadvertently assist in maintaining the White hegemonic structures in place that advanced globally out of first African enslavement, then the Capitalist social order.
Again, this is a reactionary mentality that has only worked to create exceedingly small groups and individuals of petti bourgeois Negros who work toward the economic advancement of themselves and their peers, while continuing to operate in a colonial context. Basically, being able to “live a little better” in an exploitative system of White domination. Pseudo-Capitalist ventures only prove to create a negro who has more than the other struggling oppressed Black African masses. It is opportunist, and individualistic at best. This “Let me get the Bag, so I can better serve the people ” ideology must die, fast. Unfortunately, even the best of us, when establishing ourselves as leaders by making money off of Black people, refuse to entertain any logic that will conflict with what we believe to be Maat (truth, justice, righteousness, balance, propriety, harmony, order).
Sadly, the last time in the history of Black African people’s liberation struggle, where a significant shift in economic power occurred, was on the island of Hispaniola in 1804. That moment was short-lived because of the Africans, after liberating themselves, continued to hold on to European Class ideology, which was directly connected to the former slave-based economy. Anything short of a complete shift in control of the means of production and distribution and our own African communal economy, culture, and moral system will extend White Hegemony.
Anything that is devised within this exploitative monetary system is only an out-growth of the base or foundation of the economic model. An orange tree will only produce more oranges. Sometimes, the oranges are big and bright. Sometimes they are smaller and discolored. But they will still be oranges. If we want something different from oranges, we have to stop picking from the orange tree. This goes for the crypto markets as well. Instead of using these reactionary tools, we should work on a plan to take what we have as organized collectives, to provide food, clothing, housing, education, and healthcare for all Black African Workers. Not just those who have the money to invest in simple plans for wealth. Liberation and sovereignty mean being completely divorced from the dominant social order, not just partnering with elements of it to get ahead.
It is easy to justify wrongdoing when you are profiting from it. But that still does not make it morally right. We should work for what we earn and not seek to profit off anyone else’s labor. That is exploitation. Something for nothing is theft. Black African people must collectively and cooperatively create new systems where we produce and share the things we need. Do we need money to secure the things we need in this current context? Yes. Should we abandon money and struggle in destitution? No; that is foolish. Money was created out of greed and control. We should work and earn money with integrity, to survive until we are able to make the shift toward building a Nation of our own.
As the capitalist model continues to shrink, and capitalism as an economic structure continues into its death process, digital currencies and electronic financial systems will inevitably become more efficient for nations. The opportunity for crypto markets and underground economies will ultimately be destroyed. The Black African people who relied on these cryptocurrencies and underground economies, will suffer the worst, by losing the “real” money they invest. The solution to our crises must be one that is radical, cooperative, communal, independent of exploitation, and most of all created outside of the White Hegemonic ethos.
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By Kwasi Amponsa